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Influence of Behavioural Factors Affecting Investment Decision—An AHP Analysis

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  • Anu Antony
  • Ansted Iype Joseph

Abstract

Investors exhibit irrational behaviour in their decision-making. The decision-making process itself is considered to be a cognitive process as the investors have to make a decision based on various alternatives available to them. The researchers have found that the investors’ decision-making was adversely affected by the various psychological/behavioural factors. The current study was carried forward to identify the effect of the behavioural factors affecting the investment decision of the investors. Five behavioural factors, namely overconfidence bias, representative bias, regret aversion, mental accounting, and herd behaviour, were considered to study the behavioural biases of the investors. The study sample was taken from investors of Kerala, and the analytical hierarchy process (AHP) method was used to analyse the intensity of behavioural factors affecting the investment decision. Based on the priority vector, it was found that the investors of Kerala were highly influenced with overconfidence bias and regret aversion. Herd behaviour had less effect on their decision-making.

Suggested Citation

  • Anu Antony & Ansted Iype Joseph, 2017. "Influence of Behavioural Factors Affecting Investment Decision—An AHP Analysis," Metamorphosis: A Journal of Management Research, , vol. 16(2), pages 107-114, December.
    • Handle: RePEc:sae:metjou:v:16:y:2017:i:2:p:107-114
    DOI: 10.1177/0972622517738833
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    References listed on IDEAS

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    2. Samina Rooh & Hatem El-Gohary & Imran Khan & Sayyam Alam & Syed Mohsin Ali Shah, 2023. "An Attempt to Understand Stock Market Investors’ Behaviour: The Case of Environmental, Social, and Governance (ESG) Forces in the Pakistani Stock Market," JRFM, MDPI, vol. 16(12), pages 1-21, December.
    3. Bose Olatomi Ige & Rufus Olufemi Adebayo, 2024. "The influences of psychological factors on investors decision making in the South African derivative market," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(1), pages 267-278, January.
    4. Olubunmi Edward Ogunlusi & Olalekan Obademi, 2021. "The Impact of Behavioural Finance on Investment Decision-making: A Study of Selected Investment Banks in Nigeria," Global Business Review, International Management Institute, vol. 22(6), pages 1345-1361, December.
    5. Erjavec, Jure & Manfreda, Anton, 2022. "Online shopping adoption during COVID-19 and social isolation: Extending the UTAUT model with herd behavior," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).

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